Rs. 72 mn already raised for repayment to begin in 3 weeks
July 20, 2013, 7:10 pmby Suresh Perera
After the lapse of almost three years, Golden Key (GK) depositors with holdings amounting to a net value of below one million rupees will receive another Rs. 100,000 each repayment in a fresh process expected to begin in three weeks time.
The proposed resettlement will eliminate 743 depositors from the list of 1,205 investors with deposits below the specified cut off point as, with the Rs. 200,000 repayment earlier, they would have by then received 41% of their holdings in terms of the repayment plan, officials said.
For example, a person who had deposited Rs. 730,000 would be considered to have been "repaid in full" with the total repayment of Rs. 300,000, and struck off the list, they explained.
All depositors with more than one account under his/her name will be treated as a single holding and will receive only Rs. 100,000 each under the proposed round of resettlement.
"We have been able to raise Rs. 72 million to honor this financial commitment", says Ms. Dushanthi Hapugoda, a member of the newly constituted Board of Directors of Golden Key Credit Card Company (GKCC)."The process of drawing the cheques to these depositors will now be set in motion", she said. "We are optimistic of repaying all of them in another three weeks".
She said that the new GKCC CEO and Board of Directors has been able to make another round of repayments a reality within just under two months of being appointed – a task the Watalawala Committee could not achieve for almost three years.
Depositors received the last repayment of Rs. 100,000 in 2010, she recalled. "Since then, the whole process was in a virtual state of limbo".
When the GK Fundamental Rights (FR) application resumed hearing, Chief Justice Mohan Peiris, who headed the three-member Supreme Court Bench, assured that everything possible was being done to grant maximum relief to suffering depositors.
There is no need to worry as a concerted effort is now being made to offer solace to depositors, he noted. "Everything possible is being done".
He said the repayment of dues to depositors could go beyond the stipulated 41% as more and more assets are identified and liquidated. "The new GKCC directors are doing a fine job and depositors should cooperate and bear with them until the task is accomplished".
Responding to an intervenient petitioner who sought 100% repayment of deposits, the CJ asked, "Have these depositors paid taxes? If that was duly done, the government would not have to resort to borrowing from external sources".
The Supreme Court also gave the green light for the appointment of V. K. Choksy, Aruna Lekamge and Dushanthi Hapugoda to the Special Purpose Vehicle (SPV) tasked with the responsibility of liquidating seized assets and repaying depositors.
The Counsel for Lalith Kotelawala informed court that his client was prepared to cooperate with the ongoing initiative and inject Rs. 7 billion into the repayment process.
"This would have been welcome, but we were later informed by lawyers that Kotelawala is prepared to give only 20% of this quantum on the undertaking that none of his personal assets should be acquired and liquidated", Hapugoda asserted.
"We are not agreeable to this proposition as we can raise 20% by merely selling two or three of Kotelawala’s assets", she said. "Though Rs. 7 billion was offered, he (Kotelawala) now wants us raise the balance 80% from the other GK directors".
At the time of the Watawala Committee, former GK directors forwarded a ‘Way Forward Repayment Plan’ in 2010, but after it was approved by the Supreme Court, they could not be found to implement their own resettlement formula, she recounted.
So, the whole plan had to be abandoned at the time because they back tracked and for three years distraught depositors were left kicking their heels, the director said. "We will continue to seize personal assets of directors and not be distracted by attempts to buy time".
"If Kotelawala and the other former directors are sincere in their efforts and are genuinely interested in cooperating, we are open, but otherwise ongoing moves to seize and liquidate their assets will continue", Hapugoda warned. "They cannot play hide-and-seek with us because we are not the Watawala Committee. Those days are gone".
In terms of the Central Bank’s repayment plan approved by the Supreme Court, Rs. 9.7 billion will have to be raised to repay 41% of the total holdings of depositors. The staggering Rs. 26 billion liability of this Ceylinco subsidiary was drastically trimmed by axing the rebate (interest) paid over the years – a point of discontent amongst some investors.
But, Hapugoda insisted there is no other way out of the impasse as "billions of rupees mustered by GK had simply disappeared". "We have left with a Hobson’s choice under these distressing circumstances", she pointed out.
"Depending on the quantum of assets we are able to identify, seize and liquidate, it will be possible to repay even up to 50% to 60% of the holdings of depositors", she noted. "We need to start somewhere and that’s exactly what we have done to get the whole process moving".
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